Peter Mandelson is heavy on commitment but light on measures for small business

After all the hype what will it deliver? The Government's small business package is heavy on commitment but light on measures that will make a real difference in the rough and tumble of recession.

By Roland Gribben

1:19PM BST 21 Oct 2008

Paying bills faster will hopefully make a difference to cash flow. Offering free 'health checks' to identify problems early may end up duplicating what companies have already done. Providing financial information, produced by the Institute of Credit Management, may just end up adding to the paperload.

Peter Mandelson has unveiled a package of reforms for small businesses

The biggest element - the £350m training package - is all about overhauling the training system but will small businesses have time to make a bigger commitment when they are firefighting?

Still better than nothing. Lord Mandelson has quickly demonstrated that he has lost none of his flair for 'action.' He has not delivered all he hoped, particularly in terms of easing the regulatory burden, but an astute politician should be able to find other ways around the obstacles.

One of the biggest current problems is breaking the logjam between banks and borrowers particularly over lending terms. A growing number of businesses are being forced to shut up shop because their bank manager is less friendly.

Here the Government is using its 'nationalisation' leverage to get the banks to restore small business lending to 2007 levels but unless there is more flexibility on the part of the lenders the borrowers will continue to find the price too high.

The Government is also doing its best to speed up the flow of funding from the £1bn available to small businesses in the UK out of a £24bn European Investment Bank package. The dilemma for small businesses, however, is whether they take the risk of expanding during a recession or batten down the hatches to ensure survival.

Cash is king. Getting local authorities to pay up more promptly is more important for the small fry of the business world than a ten day deadline by the bigger and more remote Whitehall departments but if the Government can produce a 'trickle down' effect in the rest of the public sector the businesses at the end of the chain should benefit.

There is no new money involved in the allotment of £350m for training - it is coming out of the existing £1bn 'train to gain' budget. The aim of a series of training courses is to help small businesses through tougher times by focusing on subjects such as business improvement techniques, leadership and management to increase skills and productivity. John Denham, Skills Secretary, is promising funding will be delivered with the minimum level of bureaucracy.

There may be more. The Chancellor is under pressure to join the small business party and cut corporation tax and businesses, big and small, are looking to the interest rate setters at the Bank of England to deliver more cuts. Will the banks pass it on? Over to you your lordship.